3M Leading Through Innovation

“Leading Through Innovation”

Roberto CastilloJenilee KilburyApril 2, 2013MGMT-762 1

Company Numbers• $29.9B annual sales• R&D Expenditures• 2012 - $1.6B• Last 5 years - $7.3B• Aim to invest 6% of

annual sales by 2017• 87,700 Employees • 34,750 in US• 8,200 researchers• 50% in US

• In more than 70 countries• 40 mfg facilities• 35 laboratories

• Products sold in nearly 200 countries• 3,102 awarded Patents

http://solutions.3m.com/wps/portal/3M/en_US/3M-Company/Information/AboutUs/WhoWeAre/

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Company Business Units• More than 35 business units under the following groups:• Consumer – homes cleaner, offices organized and buildings

well maintained• Electronics & Energy – telecommunications networks, high-

performance electronics and reliable sources of power• Health Care – medical and oral care, drug delivery and

health info systems• Industrial – abrasives, adhesives and filtration systems• Safety & Graphics – personal protective equipment, saftey and security products

http://solutions.3m.com/wps/portal/3M/en_US/3M-Company/Information/AboutUs/Businesses/

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Competition• Many smaller specialized companies in singular

fields of expertise• Few larger cross-sector competitors:• Tyco International• PPE and Industrial Products

• SC Johnson• Cleaning Products and Auto Care

• Johnson & Johnson• Health Care, Medical and Oral Care

• Strategic Group??4

Innovation at 3M• Innovation = Idea + Exploitation• Trends:• Market Research • Products = consumer demand• Mobile devices, medical technology and energy• Developing nations

• Generation of new ideas focus on customer needs• Medical products poised for growth to meet needs

of aging population (baby boomers)• Race for hospitals to digitize medical records

DePass, Dee. "3m Bets Big on Innovation." Star Tribune Nov 09 2012. ProQuest. Web. 2 Apr. 2013 .

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Innovation Culture• Cross functional teams• Sales, technical , manufacturing, product

development, business experience• Freedom to create ideas and share them• Tolerate mistake • Comfortable with Risks• Prioritization

• Lack of formal processes • Reduce Time to Market

• Value and business model • Do not kill good ideas 6

3M Corporate Innovation Culture• The 15% option• Seed capital • Own or Other business units• Corporate grants• Genesis Grant - up to $100,000

• Dual career path• Technical or managerial

• Rewards and recognition programs• 12 Global Programs• 4 US Programs

Studt T. 3M--Where Innovation Rules. R&D Magazine [serial online]. April 2003;45(4):20

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Product Cycle Development

• Prioritize ideas• Make a prototype• Numerous prototypes, trial and modification

• Manufacture the product• Six sigma

• Generate Sales• Distribution Channel which must suit the

customer

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NPD Process Basics• Match customer needs• Increase barriers to entry• Product should not be easily imitated

• Be simple and cost-effective• Have fast time to market• Have robust designs and good quality

• At 3M:• Lead User Approach• Enterprise Growth Teams 9

Lead User Approach• Customer driven, but NOT• Focus groups• Sales data• Customer complaints

• Collect information about needs and solutions from the leading edge of the target market• Similar problems in more extreme form• Adapt lead users ideas to their own business needs

Von Hippel E, Thomke S, Sonnack M. Creating Breakthroughs at 3M. Harvard Business Review [serial online]. September 1999;77(5):47-57

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Lead User Approach• Lead Users – “companies,

organizations, or individuals that are well ahead of market trends and have needs that go far beyond those of the average user”

• Advantages:• Lead users are not competitors• Willing to share knowledge• Lead users need the technology

• No cost to 3M (usually)


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How does it work?Cross-Functional Project Team- 4-6 people-Marketing and technical depts.-One project leader

Laying the Foundation-Identify target markets-Type and level of innovation desired-Stakeholder approval

Determining Trends-Talk to experts with a broad view of emerging technologies and leading edge applications

Identify Lead Users-Gather info via networking-Identify especially promising ideas-Shape prelim ideas and assess business potential

Develop the Breakthrough-Move prelim concepts toward completion-Workshop w/ lead users and team members

Commercialization-Finalize concept design-Commercialize with management approval


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Enterprise Growth Teams

• Goal: Finding new customers-driven applications for existing 3M technologies• Cross functional Team• Time to develop a new product• 3 to 6 months

• Incremental Innovation• Problem identified in one industry, able to find

solutions from current technologies in another industry

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Applying Current Trends to New Applications

• Clear Credit Cards• Credit Card company wanted a unique

transparent card design• Used technology of their optical films to

block IR light without blocking visible light

http://solutions.3m.com/innovation/en_US/stories

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Applying Current Trends to New Applications Cont’d• Micro-needles• Micro-replication pattern used in reflective street sign• Small painless patch of hundreds of micro-needles

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Applying Current Trends to New Applications Cont’d• Auto Body Filler• Mixing process is done by hand – wasteful, inefficient

and messy• Scaled up the Pentamix system used to mix putty for

dental impressions

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How does 3M win?

• Agile• Flexible• Tolerate risk • Allow mistakes• Quick to market with new products• Protect their products• 500 Patent Applications/year• Trademarks

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Conclusions

• 3M’s Strengths• Work closely customers to find trends in new markets• Creative Corporate Culture to motivate innovation• Fast development and time to market

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Our Recommendation

• What would we do?• Increase R&D spending by implementing efficiency

initiatives to reduce costs in manufacturing and supply chain• Encourage more collaboration among R&D

departments from different industries and markets• Encourage radical innovation

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Do you have any question?

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Thank You

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